Tips for homebuyers fall into a variety of categories. The advice a young, first-time homebuyer needs might not be relevant to an older homebuyer who is purchasing their third, fourth or fifth property. However, there are some universal best practices that make purchasing a home or getting a mortgage easier and more affordable. These tips include things like:
There’s also a separate set of tips and tricks for retirees, soon-to-be retirees and people who are thinking ahead and looking into rental properties. Rental properties can be an effective option for people looking for steady supplemental income in retirement and a reliable store of value and inflation-adjusted wealth.
Depending on your expenses and the number of properties you’re thinking about purchasing, you might be able to support your lifestyle on rental income or at the very least supplement your other retirement income (pensions, 401(k)s, IRAs, etc.). Some common tips for investment property purchases include:
Your approach to investment properties will likely depend on your age and where you’re at in life. Property management companies can potentially take on many tasks like finding tenants, collecting rent and maintaining the property. Alternatively, you could take on those duties yourself to avoid management fees. It all depends on how much supplemental income you need or want and the amount of time and effort you want to invest into being a landlord.
Things do break in rental properties and eventually need to be replaced. If you buy three rental properties, that’s an extra three HVAC systems, roofs and landscapes to maintain. Significant unexpected costs can arise and it’s important to budget for those things.
People who are buying a home have many financing options. Rental home shoppers can potentially get a single loan to finance the purchase of multiple investment properties. That often ends up be being easier than obtaining separate mortgages for multiple properties at the same time, which can make lenders leery.
Both Fannie Mae and Freddie Mac have investment property programs that let you buy multiple properties (usually up to 10). You might also qualify for an FHA or VA loan for investment properties if you meet eligibility requirements.
If you’re buying a home to be your primary residence, you have even more potential options. You can apply for a conventional mortgage through private lending institutions like your credit union, bank or independent mortgage lenders.
In Phoenix, Scottsdale and Tempe, the current conforming conventional loan limit is $647,200. Any financing over that amount is considered a non-conforming jumbo loan. The conforming loan limit is higher in high-cost areas, and the conforming amount can vary depending on the number of properties being purchased.
Phoenix retirement savers and investors may benefit from a free consultation with financial advisors at Fullerton Financial Planning. We would be happy to discuss ways you can save for retirement or establish supplemental income to sustain your lifestyle during your golden years. Call us at (623) 974-0300 to get started.
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